Show business leaders predict recovery early this year 7 I 1 A 14 A dawes charts show prosperity on the way by WILLIAM C UTLEY TAT bluebird Is back again the harbinger of happiness once more Is just around the corner twitting a merry tune of pros and plenty all to come to us who anxiously watt sometime in the year 1935 at least that Is what our business leaders are predicting the depres elon slon Is over say the big wigs who know and with that welcome mes sage they have been getting every thursday luncheon groups drunk with joy and send ng business conference sitters in singing their ways home in hysterical glee most ardent cl amelon clam plon of the bluebird Is chicago s gen charles gates dawes banker diplomat former vice president of the united states and more recently sotto voce angel of his city s century of progress exposit on practically all throughout the depres slon general dawes has forsaken the world famed hell maria pipe with the subterranean bowl for a comfort able curved briar of more orthodox center of gravity well hes back ing hell 11 maria again ile vias as puffing away at a great rate on hell maria marla when villen he told chica gos go s association of commerce at a recent luncheon that the depression was over he ile said good times were corn com ing and even went so strong as to name the time within six months ile not only declared declai ed recovery to be imminent he ile went a lot farther he said it was inevitable nothing can stop the progress toward it said the general just as nothing could stop the progress toward the chasm in 1929 the various steps taken by the government to aid busl bust ness and employment will neither greatly retard nor greatly accelerate the return of good times shuttling bach back and forth between an imposing display of figured charts and a microphone the general growled this Is a devil of a wiy w iy to make a speech but went ahead and made one anyway he predicted a definite boom in durable goods in may or june and he used the charts to prove it he ile refused to weep with professional economists who have been walling so long over this and that obstacle to re covery his charts showed that the depression of and 1893 both end ed five years and eight months after the original stock crashes which sent everything into a power dive history repeats itself says general dawes after a crash the public puts off all buying cp spending ending and investing 4 A frederick H ecker about five years and then goes back to work during the period of inactivity tremendous deficits of plant facilities and goods pile up when all this accumulated demand Is final ly let loose a tremendous revival in the heavy industries Is the result trend def bitely upward general dawes davies conclusions were the result of a study of the steel industry and oti ott er heavy industries over a period of several months his charts showed the trend in pig iron and steel prices and the volume of pig iron pro during three separate ten year periods marl ed by depressions they sho showed i ed that in each depression prices sl d downward for five years and eight n onti A then turned upward abruptly and climbed for about a year al though prices were not allowed to decline in the present depression pro of pig iron and steel has declined vastly more this has resulted in a tremendous accumulated demand which the general says will begin to be felt in large volume this summer steel companies will make huge profits when this action occurs he said and then prices and output will become stabilized at substantially higher levels not so rosy a picture Is that painted by col cot leonard B ayres cleveland economist he ile said the chief unsolved problem of the depression Is ment in the durable goods industries the three great obstacles which block the way back to normalcy are political ones he says they are the fear that continued governmental interference 4 11 W t az col L B ayres in business will make it impossible for corporations to show a profit fear about the future of our money and the newly revised be u act only after these readjustments are made can the accumulated shortage of durable goods begin recovery accord ing to mr ayres this shortage he estimated to be as much as the total output of all the durable goods indus tries for two and one half years the industries would have to operate at 25 per cent above their normal rate for ten years in order to make up the shortage As dawes sees it mr ayres predictions may be much more attractive than he intended them the whole thing depends upon whether or not he Is right about the attitude and action of the government here is what mr davies says the difference between colonel ayres and myself Is a marked one he ile evidently looks upon the In tion of a changed governmental policy into the situation as being definitely determinative of the question as to whether the coming year of 1930 will mark an advance in prosperity crity over 1934 while I 1 recognize the overwhelming long time importance of a balanced budget and wise governmental policy I 1 point out that the normal course of recovery involving mass action Is not determined by human reasoning but by human nature and that the rate of recovery Is following the same course in this present depression dp and for the same simple causes cause s that it did in the two great former major depressions in the country those of 1873 and 1893 1803 priming the pump through great governmental expenditures does noth ing but force an increase in business activity as long as the priming fluid lasts he said the return of prosperity in 1935 it if all goes well is also looked for by ed ward A rilene widely known boston economist much depends on whether or not the supreme court will uphold certain phases of the new deal he warned that if tl e supreme court does not operate cooperate with the president the country might be compelled to turn to socialistic measures business is pledging operation cooperation with the president and there la is un a more widespread under standing that prosperity both for con sumer goods and durable goods indus tries depends basically upon the buy ing power of the masses there Is no telling however how tar far this prom ased operation cooperation will go and we can not expect rapid improvement until business generally acts upon this new understanding will begin spending congress will arrange tor or nation wide unemployment insurance thor hughly sound business measures and millions of americans will begin to spend money which they have not dared to spend before satisfying their long accumulated wants and immediately stimulating business and providing more employment and more buying power on the other hand congress may more than undo all this good by flirting with unsound radical legisla tion particularly currency inflation some industries such as the auto mobile industry are already leading the way to recovery by courageously setting out to supply the long depressed demand for consumer goods and their success Is sufficiently marked that we may expect other industries to follow rollow suit sull if business generally does play ball with the president and the supreme e court does not call the game we may find our ourselves selNes in such a crisis that the government against its will may be compelled to turn to socialistic meas ures as the only way in the emer gency to keep the masses provided with the necessities of life trying to balance all factors my expectation Is I 1 there will be some improvement during the first three months of 1935 2 there will be some improvement in the spring and summer over the conditions of 1034 but not enough to indicate that recovery has come 3 the fall will show a marked improvement and the trend from then on will be definitely upward 4 by the tall fall of 1036 1536 we will be so far recovered as to make it gen brally evident that we are on the road to unprecedented real prosperity upturn to start soon business magazine and newspaper editors throughout the country agree that business will be on the upturn during the first quarter of 1935 A sur vey published by associated business papers inc indicated that the editors expected department store sales to keep up their recent gains into the first quarter with narrow profit margins shoe production was only 10 pairs behind the 1929 peak in 1934 but the last year years s performance Is expected to be passed early in 1930 1033 3 the outlook for the textile industry indicates that its business will be about 10 per cent better in 1935 according to the business editors editors of automotive trade papers predicted a substantial increase for the first quarter of 1935 compared with the first quarter of 1934 in the steel industry the steady small in crease in production which has existed for the last few months Is expected to be projected into the first few months of 1935 the estimated steel output of 1934 was 24 00 OO 00 tons an increase of 2 tons over 1 1933 machine tool trade paper editors called the prospects for both volume and profit in the first quarter exceed angly bright electrical apparatus wholesalers look for improvement so does the oil industry although much depends on governmental policies it Is 1 thought that the building tride might even triple the 1934 business with remodeling on a scale twice as great as in 1934 secretary of commerce daniel 0 roper who should know the situation it if anybody should called the 1935 out look indeed very satisfactory he predicted a sizeable upturn in the heavy goods industries every place I 1 go he said faces and features and the approach of per sons indicate a more optimistic outlook than has been in evidence for some time 0 probably one of the most substantial reasons for expecting a better year in X edward filene 1935 Is that advanced by frederick II 11 ecker president of the metropolitan lite insurance company we can see many reassuring facts on the econom c conzon he assert ed among these the outstanding one in my judgment jud ment Is the increase in the combined national income which for 1934 accord ng to our economists probably will exceed that of 1933 by bj something I 1 ke 15 per cent labor in come in the form of all wages and sal sat arles in the united states Is also ex pecked to show an increase over 1933 bringing it to a total of about 35 Q western newspaper anko |